What the Final Tax Bill Means for Northeastern

December 15, 2017: Article in the Chronicle of Higher Education about the FINAL tax bill

December 13, 2017: Article in the Chronicle of Higher Education about outcome of committee deliberations

December 7, 2017: Article in the Chronicle of Higher Education about tax reform bill while in committee

November 18, 2017: Email sent from Provost Bean to all graduate students

Republican lawmakers on Friday released the final version of their tax reform bill and appear on track to hold floor votes on the legislation this week.

If majorities in both the House of Representatives and the Senate approve the bill, President Donald Trump is expected to sign it.

The final bill is largely consistent with the prior Senate bill, providing tax cuts for businesses, temporary tax benefits for low- and middle-income citizens, and a new top tax rate for wealthy Americans.

The bill does restore some tax breaks that had been slated for elimination in the previous House version of the bill, including tax-free tuition waivers for graduate students and university employees, and the ability to deduct interest on student loans.

However, certain provisions that remain, like one doubling the standard deduction for tax filers, are expected to curtail charitable giving to colleges, while others could lead to reductions in state funding for higher education.

Here, we examine certain provisions of the bill and their impact on students and higher education.

Provision

Current tax code

Proposed legislation

Qualified tuition reductions

Universities may provide tax-free tuition for graduate students who serve as research or teaching assistants, and for full-time employees, their children, and their spouses

The proposed bill makes no changes to the existing exemption

Student loan interest deduction

Taxpayers may take an above-the-line deduction on interest payments made on qualified education loans

The proposed bill makes no changes to the existing exemption

Qualified tuition payments deduction

Taxpayers who earn less than $80,000 may take an above-the-line deduction for qualified tuition and related education expenses paid by the taxpayer

The proposed bill makes no changes to the existing exemption

Employer tuition assistance

Employer provided education expenses are excluded from taxable income

The proposed bill makes no changes to the existing exemption

Standard deduction

Taxpayers may itemize their deductions or take a standard deduction, currently valued at $12,700 for a married couple

The proposed bill roughly doubles the standard deduction, likely increasing the number of taxpayers who take the standard deduction and thereby discouraging charitable giving